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Amazon buys USA supermarket chain Whole Foods for $13.4bn

After the announcement, Amazon’s shares went up more than two percent and Whole Foods Market shares went up by about 28%.Well, we certainly weren’t expecting to hear this morning that Amazon plans to acquire Whole Foods for $13.7B.Analysts viewed the deal with Whole Foods as a seismic event for the sector.With this strategy, Amazon is planning to make the prices competitive and attract “more low- and middle-income shoppers” to its retail stores, which may still be located in posh localities.”People tend to do what’s easy and clicking on something on Amazon is so easy”, Funari said.”Consumers want to know what they’re getting and putting in their bodies”, said Madeline Hurley, a senior analyst at market research firm IBISWorld.”We’re becoming a giant corporation in the USA”, she said. It does well if you live in the right place.What do you think it will be like to walk into a Whole Foods 10 years from now? They don’t wash your hair, but short of that. “Whole Foods’ online grocery channel is operated by Instacart, which will likely not be the case for long if the acquisition is approved”. “I’m aging, and I was in there and I was surprised how many people were bent over with age”.Amazon has already made inroads into tackling the grocery market in the United States and UK.When Amazon approached, Whole Foods turned again to Evercore. Kroger, the nation’s biggest supermarket chain, had earlier warned Wall Street of disappointing earnings. The Journal estimated that the Amazon announcement had wiped almost $29 billion from the aggregate market cap of rivals in the grocery category. Wal-Mart, which has the largest share of the USA food market, has been working on lowering prices, while Target has been struggling to turn around its grocery business.The biggest player in the fragmented market is Wal-Mart with 14.5 percent, with Kroger second with 7.2 percent.It is predicted that Amazon could become the ninth-largest retailer by 2017 and third-largest grocery retailer by 2021.Amazon said today it’s buying the supermarket Whole Foods in a deal valued at almost $14 billion.It seemed that the Seattle, Washington-based e-commerce company’s own food delivery service through Fresh simply won’t cut it, so it acquired the natural and organic products pioneer with 456 stores and a clientele of young, high-end shoppers.Expanding into the grocery market would not only bring profits to Amazon but a room for great expansion. It could have built up its groceries business without acquisitions, said Neil Saunders, managing director of GlobalData Retail, but that would have been costly and time-consuming.But is Amazon turning into a monopoly?That was feeling of Taylor Malooly, 19, a University of Texas student at Whole Foods in Austin, who said a Whole Foods delivery service would have to be fast if he were to try it.Whole Foods has a corporate culture that prizes inclusive decision-making, such as allowing workers to vote on benefits every three years and disclosing executive pay.